Kuwait joins the list of countries restricting dealings in digital currencies.
Cryptocurrency transactions, investments, and mining of cryptocurrencies, like Bitcoin (BTC) and Ether (ETH), have been banned in Kuwait.
On July 18th, the nation's financial regulator, the Capital Markets Authority (CMA), released a directive about the control and dissemination of virtual assets in Kuwait.
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The circular was an undeniable declaration of an "absolute prohibition" of predominant applications and operations relating to cryptocurrencies.
The mandate further prohibits regulatory bodies in the country from granting licenses that enable businesses to offer services related to digital assets commercially. Yet, the prohibition does not encompass financial instruments and securities, which come under the purview of the CMA and the Central Bank of Kuwait.
In addition to the prohibitions, the CMA urged consumers to remain vigilant and to understand the risks associated with digital assets. The regulator expressed concern about cryptocurrencies, stating that they “don’t carry a legal status and are not issued or supported.”
It is not linked to any asset or issuer, and that the prices of these assets are always driven by speculation that exposes them to a sharp decline.
As outlined by CMA, the tightening regulations are in accordance with Kuwait's broader strategy to curb money laundering and terrorist financing. This action has been influenced by a study performed by the National Committee for Combating Money Laundering and Financing of Terrorism, advocating the implementation of the Financial Action Task Force's Recommendation 15.
Local news reports suggest that these cryptocurrency restrictions by the CMA are part of a larger interdepartmental ban spanning several regulatory authorities in Kuwait. Reports indicate that the Central Bank of Kuwait, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit have all issued similar prohibitions.
Despite several countries banning cryptocurrencies, the International Monetary Fund recently stated that a crypto ban is not a long-term solution.
